Startup Genome, the Silicon Valley group that ranks innovation ecosystems, has released its first ever blue economy report. And Canada, particularly the Atlantic provinces, made a strong showing.
The Global Startup Ecosystem Report, Blue Economy Edition rates Atlantic Canada as the 10th most successful oceans ecosystem globally, and Vancouver as the 14th. Calgary placed 27th and Toronto-Waterloo ranked 35th.
The rating represents a reversal of fates for the Atlantic region, which in June failed to rank among the world's top 100 emerging startup ecosystems, as determined by Startup Genome.
Atlantic Canada and Vancouver also both rated among the report’s Top Five Ecosystems to Watch, suggesting the evaluators see significant future growth potential. And Creative Destruction Labs, which runs its oceans incubator out of Dalhousie University in Halifax, ranked among the top 10 blue economy accelerators globally.
“Atlantic Canada attracted us with venture capital, non-dilutive dollars, research partners, talent, ocean access and an incredibly welcoming business community,” said the report released Wednesday. “This is the ideal region [to develop] ocean climate technology.”
An important reason Canadian ecosystems fared well is that the federal government and private sector have both invested heavily not just in oceans research, but in bringing that research to market, the report added.
Canada’s Ocean Supercluster, the federally backed organization that funds research consortiums in collaboration with the private sector, facilitating large-scale projects and helping startups build sales pipelines, is based in Atlantic Canada. The organization is a significant sponsor of the Startup Genome report, with its logo appearing on the cover.
And the Centre for Ocean Ventures and Entrepreneurship, which provides office space, equipment and mentorship for blue economy companies, operates out of a converted Coast Guard base in Halifax.
The report comes as the Supercluster is in the process of applying to the federal government for an extension of its five-year mandate, which is set to expire next Spring. A key pillar of its proposal is making climate change mitigation a central part of its investment strategy.
Startup Genome also found that the median seed round for an Atlantic Canadian bluetech company was an average of US$913,000 between 2019 and 2021, higher than the global average of US$671,000. But funding dropped off for Series A rounds at US$3 million compared to a global average of US$4.7 million.
Globally, meanwhile, the largest proportion of oceans startups are headquartered in Europe — fully 39 percent — as well as the highest number of early-stage venture capital deals.
Aquaculture, marine energy and transportation are the most funded verticals. But across the board, oceans companies have had a gangbusters few years in terms of raising capital.
From the first half of 2020 to 2022, the number of Series A funding deals globally increased by 80 percent and their median value roughly quadrupled to just shy of US$8 million. (Although the first half of 2020 was a dismal period for oceans companies, and the second half produced a more typical median deal size of just under US$5 million.)
Over the same period, the number of Series B deals increased by about 20 percent, and the average size more than doubled to around US$17 million.
Singapore was the top performing ecosystem globally with US$3.2 billion of early stage funding distributed between 2019 and 2021, and median funding round sizes that were dramatically higher than global averages at US$850,000 for a seed round and US$6 million for a Series A deal.